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Guide to Allowable Expenses

We are often asked: "What expenses can I claim now?''

The answer is "Anything that relates to your business".  Whilst this is generally true, there are some expenses which, although genuine business expenses are specifically excluded from tax relief, such as:

  • Costs and Fines for breaking the law
  • Drawings, including payments for tax and National Insurance contributions
  • Loan Capital Repayments
  • Depreciation of assets; capital expenditure is subject to the capital allowance regime
  • Business entertaining including the VAT; however input VAT on business entertaining of overseas customers is recoverable

Expenditure on plant and machinery for most small businesses is likely to be covered by the annual investment allowance but there are certain items, such as cars, where the tax allowance is spread over a number of years.

Please check our FREE RESOURCES page where you can download a PRF file with a detailed list of allowable expenses

This information is not exhaustive. 

Please contact us if you have any queries about the allowability of specific expenses and whether you want to consider the cash basis for preparing accounts.

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